How relevant are your campaigns?


Published on

Emails are flooding our inboxes on a daily basis, but as a marketer how do you get your email to the top of the top of that inbox and more importantly, how do you get someone to read that email?

Companies have been moving away from the mass mailing, mass emails and SMS blasts in favor of much more targeted campaigns. This shift comes at the request of the customer. Customers are more demanding; asking to be recognized as individuals and expecting communications to be relevant to their unique lifestyles, wants and needs.

But despite marketers being positive about the concept of personalizing campaigns, evidence suggests that in reality, marketers are not going far enough to actually make their campaigns relevant to individual consumers. This whitepaper will provide you with some useful information for creating more personalized customer communications.

Published in: Business
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

How relevant are your campaigns?

  1. 1. Part I: Getting Personal with Your Customers — Fighting Marketing Fatigue Part one of a two-part series on automated interactive one-to-one personalization AUGUST 2010
  2. 2. How relevant are your marketing campaigns? Mass mailing, mass emails or SMS blasts — ask any business to consumer (B2C) marketing professional what they think of them and they will probably tell you there’s been a shift away from such indiscriminate approaches in favor of more targeted campaigns. And they’ll tell you that the main reason for this shift is that customers are more demanding; asking to be recognized as individuals and expecting communications to be relevant to their unique lifestyles, wants and needs. “Consumers are Accordingly, in a 2008 survey conducted by the Aberdeen Group, 96 percent taking ever more of marketers said they thought One-to-One personalization would improve response rates1. direct action to avoid But despite marketers being positive about the concept of personalizing communications campaigns, evidence suggests that in reality, marketers are not going far enough to actually make their campaigns relevant to individual consumers. from companies Consequently, response rates to campaigns are inexorably declining and direct marketing effectiveness is waning. pushing irrelevancy.” CEOs are — quite rightly — putting their marketing directors under pressure to deliver more value from marketing investments and initiatives. Marketing fatigue There’s a growing body of evidence to show that the cause of the decline in response rates is that consumers are simply fed up with being bombarded incessantly by overwhelming quantities of irrelevant marketing material. Research quoted by analysts Forrester Research Inc., is sobering: 2 • “Say they receive too much marketing. Two-thirds of U.S. consumers (66%) say there is too much advertising today. Sixty-two percent say they get too much direct mail, 66% say they get too much email marketing, and 67% get too much telemarketing.” (see Figure [2] ). • “View marketing as irrelevant. Only 14% of U.S. consumers agree that the ads they see are relevant to their wants and needs, and even fewer agree that the direct mail (10%) and email marketing (7%) that they receive is relevant.” (See Figure [1] ). “Indicate how much you agree or disagree with following statements regarding advertisements over.” Strongly agree [5] [4] [3] [2] Strongly disagree [1] N= The ads I see are relevant to my personal wants 5% 9% 40% 30% 17% 4,545 and needs The direct mail I receive is relevant to my want 3% 7% 26% 30% 35% 4,609 and needs The marketing emails I receive are relevant to 2% 5% 19% 26% 48% 4,506 my wants and needs Base: US adults (percentages may not total 100 because of rounding) Source: North American Technographics® Media, Marketing, Consumer Technology, Healthcare, And Automative Benchmark Survey, Q3 2008 53621 Source:Forrester Research, Inc. Figure 1: Consumers Don’t Believe That Marketing Is Relevant 2 AUGUST 2010
  3. 3. These results suggest that people are suffering from ‘marketing fatigue’ as a result of the incessant and too often irrelevant product campaigns blasted at them. The consumer’s first reaction is — no reaction! They simply don’t pay attention to communications from companies that have not won their trust through always being relevant, and they don’t buy the products promoted. Consumers are taking ever more direct action to avoid communications from companies “One-to-One pushing irrelevancy. They opt out and register with do-not-call lists. In the case of marketing emails, they block them as SPAM. At worst, when their patience campaigns target runs out, consumers may reject not just a brand’s direct marketing, but the brand itself. the customer’s If marketers really are attempting to personalize campaign communications, then current situation, the only conclusion to draw is that what they are doing really isn’t working. Evidence suggests that quite typically when marketers talk of personalization, their expressed what they mean is ‘segmentation-based personalization,’ meaning that all the customers belonging to a segment selected by the marketer will receive the and implied wants same message and offer. Sure, the customer’s own name might appear at the top, but that’s all that is truly individualized. In the 21st century, customers are and needs.” savvy and expect a lot more before being prompted to engage. Marketers who do not pay heed to the voice of the customer and simply continue to target them with irrelevant messages and campaigns, do so at their peril. Such campaigns are counterproductive and unlikely to pay back. Pushy sales pitches turn customers off; but personally relevant and interactive conversations switch them on. The One-to-One Personalization Era Starts Today One-to-One personalization has long been held up as a kind of marketing nirvana — an idyllic state where the brand can hold personal relationships with potentially millions of customers. Here, well considered offers are presented as a part of natural customer marketing conversations. One-to-One campaigns target the customer’s current situation, their expressed and implied wants and needs. Messages are timely and relevant for the customer and they deliver the desired results for the marketer. But just how far away are marketers from this holy grail? Levels of personalization There is evidence that five degrees of personalization exist today within marketing organizations: • Mass emailing, where one message is sent to all. • Name based personalization (or light personalization) is superficial. The customer’s name is typically placed at the top of what is otherwise the same message sent to all recipients. Customers can see through this and quickly tire of opening messages that are still no more relevant in content. • Segment based personalization (or medium personalization), goes one step further. It hinges on selecting often very large target groups, then creating one message for each group. All of the people in each target segment receive the same message. Even though each customer is an individual and has their own relationship with the company — their own preferences, and interaction history — none of that is referred to in the communication they receive. 3 AUGUST 2010
  4. 4. • One-to-One personalization (or heavy personalization), comprises content that is specific and relevant to the individual customer. It’s drawn from a detailed and living profile of the customer, their profile, behavior, needs, wants. Name and address, offer content, partner offers, branding and layout can all be adjusted to provide a best fit for every individual customer. Communication channel used and frequency of contact is respectful of customer preferences as well. Increasingly marketers are willing to shift to One-to-One personalization. “Pushy sales • Interactive One-to-One personalization. This applies the One-to-One concept pitches turn to interactive channels, enabling content delivered through web pages and online assistants (avatars), for example, to be personalized in real-time customers off; while being consistent with messages delivered through other channels but personally Aberdeen has observed the proportions of organizations practicing these various degrees of personalization: relevant and Level of Personalization Percentage Currently Using interactive Mass emailing 43% conversations Light personalization 63% switch them on.” Medium personalization 33% Heavy personalization 16% Figure 2: Personalization Trends in emails (Source: Aberdeen 2008) The reality is that when marketers say they are practicing personalization, they are usually referring to ‘light’ or ‘medium’ personalization. i.e. name or segmented personalization. Only 16% of marketers are actually using One-to- One personalization (Heavy personalization) to tailor their messages to customers’ needs. Does One-to-One Personalization work? There is evidence to support the concept that as personalization increases, marketing fatigue falls and conversion rates increase to a model approximated by the following diagram: Conversion Rates Value ROMI Interactive One -To- One One -To- One Segment Name None Maturity Fatigue Timeline Personaliztion Sophistication/Maturity Figure 3 (Source: Neolane, Inc) 4 AUGUST 2010
  5. 5. The evidence for this concept comes both through market research and through empirical observation. Market research evidence According to a survey reported in Print Week3: • 70 percent of UK adults say they are 5-10 times more likely to respond to ‘properly personalized marketing’ compared to superficially personalized Conversion rates direct mail. improve by • 66 percent of UK adults say they are more likely to respond to direct marketing that reaches them at the right time. 22 percent when An independent analyst firm4 has also conducted research that suggests that a move from segmentation-based marketing to One-to-One personalization can shifting from makes a tangible difference. The findings suggest that: segmentation based • Conversion rates improve by 22 percent when shifting from segmentation based personalization to One-to-One. personalization to • Customer retention rates improve by 60 percent when shifting from One-to-One.” segmentation based personalization to One-to-One. Empirical evidence There is an increasing amount of experiential evidence from companies that have made the switch: • Accor Hotels: The world’s fourth largest hotel group increased online revenue by $200 million. A survey of customers revealed that 35 percent of newsletter subscribers were directly influenced in booking a room by the personalized communications they had received. • EMI Music (France): In 18 months, EMI improved it’s digital revenue and tripled its customer database size when it personalized the content of artist- to-fan communications via email, mobile and social. • Sephora: The beauty chain with 500+ stores worldwide doubled response rates when it switched to personalized-content direct mail. • Bales Worldwide: The luxury travel operator conducted a champion/ challenger campaign comparing segmentation versus One-to-One based personalized emails. It measured an increase in conversion of 100 percent and a tripling of brochure mailing responses. The firm credits campaign personalization with delivering a five percent revenue growth. • AXA Bank: Personalized approaches raised opening rates of loyalty emails to 60-80 percent and achieved a 5-10 percent conversion rate. • DigitalGlobe: The satellite imagery provider improved email opening rates by up to 15 percent and reduced opt-outs to 0.33 percent. 5 AUGUST 2010
  6. 6. The way ahead To reach customers in ways that they accept and prompt positive responses, campaigns must be relevant. Content and timing must be individualized to each customer’s circumstances and it must be consistent and coherent across all channels — direct mail, email, mobile messaging, call center, Web and social media. There is an increasing body of survey and case study evidence to prove that One-to-One personalization is the answer: evidence that conversion rates leap as relevancy is improved. Companies must get more personal with their customers and marketing technology now provides the answer. We invite you to learn more about how Neolane can help your organization fight marketing fatigue. Contact Neolane at +1 617 467-6760 or visit Please look for the second installment of our series, “Getting Personal with Your Customers – Beyond Segmentation,” available soon. About Neolane Neolane provides the only enterprise marketing software specifically designed to manage, automate and optimize programs across traditional and emerging channels including direct mail, email and mobile. With Neolane’s cross-channel marketing and lead management solutions, marketers can manage campaigns, resources, customer data and analytics from a single platform to dramatically improve effectiveness and ROI. Built by marketers for marketers, Neolane is used by more than 240 of the world’s leading companies including Accor Hotels, Alcatel-Lucent, Orange, and Sephora. 1 “Email Marketing — Get Personal with your Customers,” Aberdeen Group, June, 2008 2 “Marketers: Stop the Abuse! Adopt Preference Management,” Forrester Research, Inc., July 2009 3 Print Week: GI Direct survey: Properly personalized direct mail boosts business, March 2009 4 Aberdeen 2008 — ‘Email Marketing: Get personal with your customers’ Neolane, Inc. One Gateway Center - 7th Floor 300-334 Washington Street Newton, MA 02458 Office: +1 617 467 6760 Fax: +1 617 467 6701 United States United Kingdom France Scandinavia Copyright 2010 Neolane, Inc. All Rights Reserved This research brief is for informational purposes only. Neolane, Inc. makes no warranties, expressed or implied, in this document. Neolane is a trademark of Neolane Inc. in the United States and other countries. All other trademarks contained herein are the property of their respective owners. 7 AUGUST 2010